Buying a brand new home can be one of the most thrilling things for a new homeowner—it's the ultimate clean slate just waiting to be filled with lasting memories. But buying a new home has a few caveats that really can't be ignored. Find out more about what's different with a new construction sale so there are fewer surprises.
The Timeline of Buying a New Construction Home
With a new home, buyers have to contend with the owner's schedules (which can be difficult enough). With newly constructed homes, buyers have to deal with delays from government authorities and nasty weather. Unfortunately, both climate patterns and local politics can be extremely unpredictable, so buyers should be ready for possible hiccups. However, it's important that buyers understand that not all excuses are created equal. For example, builders can typically work in snow and light to moderate rain. Cold weather may impact certain factors (e.g., when a driveway is poured), but it shouldn't delay the project as much as you might think.
Negotiating to Buy a New Construction Home
When builders drop their prices, they set a precedent for the rest of the properties they sell. Even one exception could lose them money for any new projects they take on, and the real estate agents they hire are well aware of this fact. It's why having your own real estate agent with experience in new construction homes can make it easier to find ways around this. If the property isn't in high demand, builders may do decide to cover closing costs or upgrade the property instead of dropping the price.
How Negotiations for a New Construction Home Purchase Differ from a Resale Home
Though market conditions matter most, in most locations, new home builder are typically less willing to negotiate with buyers than resale home sellers are. This means that homebuyers must be creative in finding negotiations that will receive a positive response.
In almost all markets, lowball bids will just not work. Instead, prospective buyers of new construction homes must look for ways to add value to their purchase. Asking to wrap all closing costs into the purchase price or an extension on the warranty can often achieve the best results. When buyers take the time to find and utilize the right negotiation tactics, they can get the best deal without missing out on winning the bid.
The Logic Behind Buying a New Construction Home Over a Single-Family Home
When a homeowner sells a house, even with the help of a real estate agent, their emotional stake in the game can drastically affect their decision-making process. But a new builder has no connection to the house whatsoever, which means they make calls based on what's good for profits. Every day is a loss if a home doesn't sell, making it important they sell sooner rather than later. Look for homes that have been on sale for longer than a month if you want to get the best possible deals.
Contract Requirements for a New Construction Home
It's always important to get everything in writing, whether buying a previously-owned home or not. However, new construction can be particularly hazardous, especially if the home isn't finished by the time it's purchased. Get the home inspected to ensure the quality of the construction is everything the manufacturer promised before making an offer. If it's not, you'll have more leverage to get the property up to standards (or to abandon of the sale entirely) Whatever is agreed upon, make sure it's all written down before formalizing anything. Request that all contingency plans and consequences are spelled out before you sign.
Research to Be Conducted When Buying a New Construction Home
Sometimes construction projects are completed in new neighborhoods like West Springs that the buyer knows little about. The builder certainly isn't likely to broach what's coming down the pipeline in terms of change, and even the buyer's real estate agent may have no idea. So it's on the buyer to do their homework about the value of the property both now and in the future. The same is true of everything from the lender to the concessions made for the purchase agreement. For example, a builder may reasonably ask for deadline exceptions if they have trouble getting the necessary approvals from local ordinances, but some companies may use this as an indefinite excuse to delay the timeline.